Restructuring brings profit for Vienna Insurance Group in Romania

Austrian insurer Vienna Insurance Group (VIG) made a EUR 1 million gross profit in Romania in the first half of this year, after it started a restructuring process of its local businesses. In the first half of 2013, the group recorded EUR 17.9 million losses in Romania. The positive result in Romania contributed to the 41% increase in profit reported by the group. Vienna Insurance Group recorded a gross profit of EUR 291 million, with the CEE region contributing EUR 159.4 million to that result. “The strong results in the CEE region are a major contributor to the group’s excellent performance. The actions taken in Romania also show first positive effects,” said Peter Hagen, CEO of Vienna Insurance Group. VIG’s business in Romania declined in the first half, with gross premiums underwritten down by 15.8%, to EUR 165.2 million. This was mainly due to the life insurance business, which contracted by almost 35%, to EUR 27.5 million, as the company removed its employee benefit product. This decision was taken after several employees of BCR Asigurari de Viata, VIG’s life insurance subsidiary in Romania, were arrested last year in an insurance fraud/tax evasion criminal case. VIG’s general insurance business declined by 10.6%, to EUR 137.7 million. VIG operates on this segment through two companies, Omniasig and Asirom. VIG’s three companies in Romania last year posted EUR 100 million losses and forced the Austrian group to contribute more than EUR 60 million to their capital, in the first six months of this year, to cover for the losses. Andrei Chirileasa, andrei@romania-insider.com